THETRUTHSEEKER IDENTIFIES THE FIFTH COMPANY UNDER SEC PROBE THAT RAFI KHAN PROMOTED WITH HIS BROTHER-INLAW AND CONTROLLED THROUGH "Aura Private Ltd". RAFI KHAN'S BROTHER-INLAW JOINS A LONG LONG LIST OF FRAUDULENT PROMOTERS TIED TO HEMISPHERX BIOPHARMA
SEC Asks Court to Force Testimony of Banned Broker Rafi Khan
By David Evans
12/05 20:25Los Angeles, Dec. 5 (Bloomberg) -- The Securities and exchange Commission asked a federal court in Los Angeles to force ex- stockbroker Rafi Khan to appear for a deposition in a probe of allegations he committed fraud after being banned from the securities industry two years ago. Khan failed to appear at the Commission's Los Angeles office on Nov. 26, 2002, as ordered by an SEC subpoena, the agency alleged. The Commission issued a formal order of investigation issued against Khan on Nov. 13, 2001. ``The SEC already deposed Rafi Khan in June, 2001,'' said his attorney, Saied Kashani. ``I think it's time for them to fish or cut bait.'' SEC attorney John Bulgozdy said Khan's testimony last year was in connection with a different investigation being conducted by the Washington, D.C. office of the Commission. In the current investigation, the SEC is examining allegations that Khan violated his ban from the securities industry by illegally promoting stocks, according to the SEC's court filing. Khan has tangled with regulators for a decade. He pleaded guilty in September 1999 to filing a false 1991 tax return and was sentenced to probation. In May, 2001, Khan was barred from the securities industry after agreeing to a permanent injunction forbidding him from committing securities fraud in the future. The SEC charged him with manipulating shares of Future Communications Inc. in 1993 and L.L. Knickerbocker Co. in 1995. `Buy' Recommendations In the subpoena enforcement action against Khan, the agency said it has uncovered evidence that Khan may have illegally promoted the purchase of stock in five public companies by failing to disclose that he was paid to make the recommendations, and then quickly selling shares of the recommended stocks held in brokerage accounts in which he failed to disclose his ownership. The SEC said it also has evidence that Khan used overseas entities and family members to conceal his activities, the court filings show. Last April, the SEC it was investigating ``buy'' recommendations by Khan on four companies -- GenesisIntermedia Inc., Aura Systems Inc., Euniverse Inc. and Ontro Inc. -- in exchange for stock or warrants issued by the companies to Pakistani firms owned by Khan's brother-in-law, including Aura Private Ltd. Bulgozdy declined to name the fifth company allegedly promoted by Khan. The SEC said Aura Private has refused to provide records it maintains in Pakistan to the Commission. Probe Became Public The SEC's current investigation of Khan became public in April when the SEC sought to enforce a subpoena against Khan's wife, Rubina. The SEC said it suspected he was using accounts in her name to conceal his illegal activities. Rubina Khan provided written answers to SEC questions after a doctor said giving sworn testimony could be injurious to her health, said Bulgozdy, and the agency dropped its subpoena enforcement action against her. Before being barred from the industry in May, 2000, Rafi Khan neither admitted nor denied SEC allegations that he pocketed $552,500 by orchestrating two stock manipulations in 1993 and 1995 through ``wildly exaggerated earnings and price projections.'' Khan has previously said he made clients millions of dollars in the summer of 1993 by recommending companies such as Future Communications and Spectrum Information Technologies Corp. Share prices of both increased four-fold. He also led an unsuccessful battle to oust former Yugoslavian Prime Minister Milan Panic from his post as head of ICN Pharmaceuticals Inc.
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HEMISPHERX BIOPHARMA INC 424B1 10/1/1999
Aura (Private), Ltd. 0 540,000 300,000 300,000 0 240,000 **
---------------------------------------------------------
Selling Stockholders
This prospectus relates to the proposed sale by us, agent or agents designated by us, or certain stockholders of:
o 2,125,000 warrants owned by the selling stockholders
o 2,125,000 shares of common stock underlying the selling stockholders' warrants
Although not set forth in this part of the prospectus, this prospectus also relates to the registration of 304,165 shares of common stock in our treasury and 2,125,000 shares of common stock issuable upon exercise of the warrants held by selling securityholders.
The following table sets forth as of August 25, 1999 certain information with respect to the selling stockholders. The selling stockholders have no material relationship with us and have not held any position or office with us during the past three years, except where noted. We will not receive any of the proceeds from the sale of the warrants or the shares of common stock underlying warrants. We believe, based on information supplied by the selling stockholders, that each of them has sole voting and investment power with respect to the warrants and shares of common stock underlying warrants.
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Securities Securities
Owned Prior Securities Owned
to Offering(1) Offered After Offering(2)
------------------ ---------------- -----------------
Common
Stock
Name of Selling Common Underlying Common
Stockholder Stock Warrants Warrants Warrants Stock Warrants %
----------- ----- -------- -------- -------- ----- -------- -
Jerome Belson(3) 853,100 691,000 100,000 100,000 853,100 591,000 5.4
Cary Field 0 50,000 50,000 50,000 0 0 0
Sharon Freedman 12,700 50,000 50,000 50,000 12,700 0 **
Mark Palazzo 0 10,000 10,000 10,000 0 0 0
Stanley Zaslow 0 10,000 10,000 10,000 0 0 0
Sage Group 0 390,000 390,000 390,000 0 100,000 **
Olmstead Group 0 240,000 240,000 240,000 0 0 0
Aura (Private), Ltd. 0 540,000 300,000 300,000 0 240,000 **
Paul Michaels 0 50,000 50,000 50,000 0 0 0
Lawrence Zaslow 0 50,000 50,000 50,000 0 0 0
Peter W. Adolph 0 50,000 50,000 50,000 0 0 0
Marc E. Komorsky 0 50,000 50,000 50,000 0 0 0
Herbert Cron 0 30,000 30,000 30,000 0 0 0
Jan McNabb 0 10,000 10,000 10,000 0 0 0
Wellman Consulting 0 12,500 12,500 12,500 0 0 0
Estate of Joseph Niebler 0 15,000 15,000 15,000 0 0 0
Jerry Friedland 0 5,000 5,000 5,000 0 0 0
Gerald Kay 0 525,000 300,000 300,000 0 225,000 **
Michael Freedman 0 25,000 25,000 25,000 0 0 0
Peter W. Rodino III 0 15,000 15,000 15,000 0 0 0
Theresa Bonavita 0 500 500 500 0 0 0
Nick Agriogianis 0 29,850 29,850 29,850 0 0 0
Mark Zaroff 0 29,650 29,650 29,650 0 0 0
Jade Zaroff 0 20,000 20,000 20,000 0 0 0
Mason Zaroff 0 20,000 20,000 20,000 0 0 0
Dakota Management Corp. 0 12,500 12,500 12,500 0 0 0
Mitchell Abrahams 0 20,000 20,000 20,000 0 0 0
David G. Watumull 0 20,000 20,000 20,000 0 0 0
Greg Morrison 0 35,500 35,500 35,500 0 0 0
Donald Hammerle 0 30,000 30,000 30,000 0 0 0
Brent Root 0 500 500 500 0 0 0
R. Robson Trust
James D. Hubbard TTEE 0 4,000 4,000 4,000 0 0 0
National Financial Group 0 20,000 20,000 20,000 0 0 0
Francis Bodkin 0 120,000 120,000 120,000 0 0 0
** Less than 1%
(1) Does not include securities held in street name.
(2) Assumes the sale of all the securities offered in this prospectus.
(3) Includes 561,000 Class A Warrants, of which (i) 25,000 are owned of record by Maxine Belson, Mr. Belson's wife; and (ii) 21,000 are owned of record by Matthew Belson, Mr. Belson's son. Also includes (i) 100,000 warrants to purchase Common Stock at $3.50 per share; (ii) 30,000 warrants to purchase Common Stock at $1.75 per share; (iii) 20,000 shares of Common Stock owned of record by The Jerome Belson Foundation, of which Mr. Belson is a trustee; (iv) 15,000 shares of Common Stock held by Maxine Belson; and (v) 25,500 shares of Common Stock held by Matthew Belson.
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